HSBC has agreed to a penalty of approximately USD 312.9 million following an investigation into allegations of tax fraud regarding dividend payments.
In the wake of this announcement, French authorities stated that the case is anticipated to be concluded once HSBC pays the fine.
HSBC’s officials have indicated that the settlement with the French court will concentrate on identifying corrective actions necessary for addressing the issue, while also emphasizing customer service as a priority.
Handling the situation and settling the case
The probe implicated HSBC France’s activities between 2014 and 2019, where it allegedly engaged in intra-group dividend arbitrage transactions to exploit tax-exempt benefits from such dealings. According to prosecutors, these actions amounted to ‘aggravated tax fraud’.
This development comes after the CMA fined Citibank, HSBC, Morgan Stanley, and Royal Bank of Canada over gilt information sharing. The UK’s competition regulator found that employees used Bloomberg chat rooms to exchange sensitive trading details between 2009 and 2013. Each bank agreed to pay fines totaling over GBP 100 million in separate cases with the CMA.
HSBC also received an official warning from the CMA back in January 2023 for failing to provide accurate information about its Open Banking services, products, and solutions. The financial institution had misstated details regarding charges, rates, and fees on over 50 occasions, breaching the PSD2 Open Banking regulatory framework.
